Billionaire business magnate Carl Icahn had a few choice words to say about the GOP on Thursday, telling CNBC Republican lawmakers are suffering from a near “pathological” misunderstanding of the national economy, and they may be hurting markets and Americans alike.
Icahn argued America would have a “day of reckoning” without fiscal stimulus, and stated the U.S. government “certainly could do more spending.” He noted the Republican-controlled Congress is “obsessed with this deficit to a point that I think it’s almost pathological.”
“The Republican Party that I used to be more sympathetic with – I’m right in the middle now, although as you know I’m for Trump – but what I would say is Congress is in this massive gridlock,” he said.
He argues the gridlock and lack of fiscal stimulus have resulted in the Federal Reserve keeping interest rates low. This in turn has created “tremendous bubbles” and the “wealth gap.”
Icahn says a “country is not a company,” and while a company can go bankrupt if it owed too much money, the same cannot be said of the United States anytime soon. He suggests worrying about the deficit is not a smart way to govern, as long as the dollar remains the global reserve currency and there is no significant inflation.
“They keep saying we owe all this money to China, but we’re really not going to pay it back ever in a normal way,” Icahn said. “So China decides ‘I want my money back.’ OK, well how do you want it back? You want dollar bills, you want Treasurys, what do you want?”
He cautioned he’s not advocating for the government to “go crazy and borrow money and have money floating around and have rampant inflation.”
“Everything has equilibrium, everything has a middle ground, and we are so obsessed with that deficit,” Icahn said. “And I never thought I’d agree completely with guys like (economist Paul) Krugman, but in this sense he’s sort of right: I mean, you absolutely need fiscal stimulus in this economy.”
Watch a March 31 interview with Carl Icahn in which he issues a dire warning about what lies ahead for the markets and the country:
Icahn supports Donald Trump as the Republican candidate, despite his comments about the economy which disagree with many Republican politicians. He says the right-wing establishment doesn’t like Trump in part because he’s a pragmatist.
“He’s going to do for this economy what should be done,” Icahn said. “Trump is the only candidate who can stop the terrible gridlock in Washington and make Congress work again.”
Last year, Trump suggested Icahn might be suitable as his Treasury secretary, but the business magnate declined the offer.
“I am flattered but do not get up early enough in the morning to accept this opportunity,” he said.
When Trump was asked about the relationship between the two giants of business, the presidential contender said, “We just like each other.”